Those decisions are driven by profitability.
Same goes with tobaccos. Once government subsidies ended, growers had decisions to make. Many stopped growing tobacco and went into more profitable crops. Others cut costs by changing the way crops are harvested, replacing handpicking leaves when they hit peak maturity with machine harvesting that mixes mature leaf with immature leaf. "Good enough" tobacco is what you're getting no matter what the label says. Money dictates.
Nobody is immune. HU blends that I like have definitely taken a hit sometime in the last couple of years. Out goes Perique (too expensive) and in goes dark fired (cheap and who will notice the difference?).
Exactly, but this is nothing new. The history of the tobacco industry, for over 100 years, has had one consistent theme: consolidation. For the last few decades, starting at least with the Master Settlement Agreement, that consolidation has been aided by governmental regulatory bodies. The FDA regs are but one manifestation of the use of governmental powers to drive small players out of the market. While almost never discussed in the US, the EU and some other developed countries have implemented a track and trace system that will further reduce the ability of smaller players to compete.
“ Accountability from seed to sale” rules that track and trace will dictate is a burden for everyone from growers up through the ultimate retailers, but Scandinavian and MacBarens were so called “stakeholders, ” so they had input into the drafting of these regulations. Companies like Gawith and Germain didn’t.
As one small example of the impact “track and trace” is already having, I will quote from private correspondence from someone in England who is an enthusiast with no industry connections:
“I was in Greece this summer. Had it all set up to buy some bags of pure Xanthi basma from a Greek company called Wolfway. When I got to the local shop I was told that the new governmental regs mean they can't move loose tobacco from one part of the country to another without it being GPS tracked or something! It was insane. It was confirmed by the company meaning the costs involved meant national distribution was over and they were effectively closing down. So if I was a tobacco farmer in Xanthi I'd be looking to grow something else.”
Regulatory capture seems to be an inevitable part of regulation. Big players manipulate regulations to make life difficult for small players. If there is “quality leaf” being grown today, the quantity is an increasingly diminishing rounding error in any countries tobacco production statistics.
But life goes on. The flavor and fragrance industry and their tobacco industry customers are creative sorts. Marketing execs will always come up with a way to make consumers think they are being discriminating and buying a quality product. In the meantime, consolidation and homogenization will continue apace.
If you want to find villains, Big Tobacco is a convenient one. And the two largest players in the pipe tobacco part of Big Tobacco are Scandinavian and MacBarens. They are Danish.
They both know that unit volume in pipe tobacco is declining. Scandinavian is a public company, their quarterly and annual reports are available online, and they freely acknowledge this. How do you make such a business profitable? Lower production costs (see, for example, Scandinavian closing their Tucker,Georgia plant and opening a facility in the Dominican Republic), the costs of raw materials (substituting cheap leaf with added flavorings for expensive varietals like Perique and the various Orientals) , maintaining market share (using regulatory bodies to eliminate or at least constrain smaller players) and raising prices. Textbook.
